Receiving and processing payments for services rendered is critical to the financial health of any business. This is especially true for businesses that provide ongoing or recurring services and bill their customers on a periodic basis (such as monthly) for those services. Examples of these types of businesses include alarm service provides, electric service providers, telephone service providers, Internet service providers, cable television service providers, and natural gas service providers.
While receiving and processing payments for services is a necessary and important activity for these businesses, it is also a costly and time-consuming activity. Conventional payment receiving and processing methods typically require customers to mail their payments to a central receiving location, sometimes referred to as a lockbox operation. These central receiving locations are often affiliated with a bank or other financial service provider. Customers mail in the remittance stub they receive from the business, along with a form of payment. The form of payment may be a personal check, a bank check, a money order, or possibly a credit card authorization. The central receiving location opens the received mail, electronically scans the payment to record the information, and then deposits the checks or money orders in the business's bank account, or processes a credit card charge. The payment information, known as remittance advice, may comprise the customer name and address, the account number, and the payment amount and date. The payment information is electronically compiled and periodically transmitted in a data file to the business.
While conventional lockbox operations are widely utilized, there are several drawbacks to this system. One drawback is the time it takes to complete the payment cycle. The cycle begins when payment is sent from the customer to the central receiving location, typically via the U.S. Postal Service. The transit time for the payment will typically be two to three days. The payment must then be removed from the envelope and scanned. The check must then be deposited. After the check is deposited, it may take a week for the money to be received by the business from the customer's bank. It is also possible that the U.S. Postal Service may misdirect the payment, thereby further delaying receipt and processing of the payment.
Another drawback of conventional lockbox operations is the requirement for the customer to send payment in the form of a check or a credit card authorization. Most businesses strongly discourage customers from sending cash because it may easily be lost or stolen during processing of the payment. In addition, many customers, particularly those with low incomes, do not have checking accounts or credit cards. These individuals must purchase a money order as their method of payment. However, money orders can be expensive and inconvenient to obtain.
The delay in receiving and processing payments from low-income customers can also be a problem for businesses since low-income customers sometimes delay sending payments as long as possible because of lack of money. Sometimes the customer may delay sending the payment until right before the service is to be terminated for lack of payment. If the customer waits too long, or if the mail is misdirected, this delay may cause the payment to be received late, which may in turn cause the business to terminate the service it is providing to the customer resulting in either the customer or the business having to incur the expense associated with reconnecting the service.
An alternative system of payment receiving and processing involves on-line bill payment. In one version of an on-line bill payment system, the customer accesses the customer's account via the business's Internet site. The customer may then provide payment directly to the business by authorizing a credit card payment, or by providing checking account information that will allow the business to request and receive payment electronically from the customer's bank. In another version of an on-line bill payment system, the customer accesses the customer's bank account via the bank's Internet site. The customer may then authorize the customer's bank to send a payment electronically directly to the business's bank account.
The on-line bill payment system addresses some of the drawbacks of conventional lockbox operations. However, the on-line bill payment system still requires the customer to have a bank account or a credit card. Additionally, the customer must have Internet access. Therefore, the on-line bill payment system may not be a suitable solution for some low-income customers.
Another alternative system of payment receiving and processing involves in-person bill payment. In such an in-person payment system, the customer must go to a specified location and tender payment. This may involve the customer going to the location of the business whose bill is to be paid or to an in-person service center operated by the business; for example, going to the office of the electric service provider to pay the bill for the electric service. This method allows the customer to pay using a variety of payment methods, including cash. However, the location of the business or the in-person service center operated by the business may be far from the location of the customer, thereby making it infeasible or undesirable for the customer to travel to the location of the business or in-person service center. In addition, operating such in-person service centers for receipt and processing of payments can be expensive for the business thereby decreasing what may already be a relatively small profit margin.
In some in-person payment receiving and processing systems, the payment may be tendered to a third party, who then forwards the payment to the appropriate business. A given third party may accept payments for numerous different businesses. These third parties are often grocery stores. These third parties accept these payments as a convenience to their customers (i.e., the customer may be located closer to the third party than the business or in-person service center and, thus, more convenient for the customers) and also because the third party receives a fee for every payment accepted (i.e., a commission). Additionally, a few states require by law that grocery stores accept payments for utility bills. This type of in-person bill payment system has the advantage that the cost associated with collecting the payments is less than the business operating its own in-person service center, since the cost is split among all of the business utilizing the third party's collection services. However, a drawback to this type of in-person bill payment system is that it requires an employee of the third party to accept the payment. This prevents this employee from performing the employee's main duties during the time the employee is accepting payments. Because of this, the third parties demand a larger commission than would be demanded if accepting the payment did not require use of the third parties' employees. Additionally, the employee accepting the payment must record the payment. It is possible that the employee could make a mistake while recording the payment and that could prevent the customer's account from being properly credited. Also, the payments received by the third party must be transferred to the appropriate business, thereby delaying the business' receipt of the remittance advice and money. The delay caused by the processing time for paper checks is also inherent in this system.
Another alternative system for receiving and processing payments involves an interactive customer interface, such as a kiosk. Examples of these systems are described in U.S. Pat. No. 5,616,902 to Cooley et al., U.S. Patent Application Publication No. 2002/0152165 to Dutta et al., which was published on Oct. 17, 2002, and U.S. Patent Application Publication No. 2003/0097332 to Golasinski et al., which was published on May 22, 2003. There are many benefits to an interactive customer interface system for receiving and processing payments. Such a system may allow several different forms of payment, such as cash, credit card, debit card, or check. Additionally, using such a system allows a customer to avoid the delay inherent in sending a payment by mail. Such systems, in the form of kiosks, may be placed in a variety of locations, such as retail stores, allowing them to be conveniently located near customers. Such systems may be capable of accepting payments for a variety of different businesses. Such systems also allow payments to be accepted without requiring any action by an employee of the retail store where the kiosk is located.
While these interactive customer interface systems provide a number of benefits, these systems do not provide either the customer or business real-time access to customer account information or access to a customer's payment history. As such, the customer generally must know the balance due and the payment due date to make a payment. Additionally, the customer may be required to physically possess the bill when making a payment, as these systems may require that the bill be scanned. These conventional interactive customer interface systems also must be periodically monitored by the business to remove payments and/or confirm operation of the interface, which can be an inefficient use of an employee's time (particularly, where the interface has room for additional payments and/or is operating fine). In addition, while such interfaces provide a more efficient system for collecting payments in comparison to other conventional in-person payment systems, such systems do not assist the business in selling or expanding its service offering to customers as perhaps would be done by an employee in an in-person service center.
As such, there remains a need for a system, method, and computer program product for receiving and processing payments whereby a customer can make a payment to a variety of businesses at any one of a variety of locations using a variety of payment options, whereby the customer has real-time access to account information, and whereby the businesses have real-time access to the payment information. In addition, the system, method, and computer program product for receiving and processing payments should assist the business in selling or expanding its service offering to customers.